“Single women are embracing wealth creation through home buying” : Deputy Chief Economist

Odeta Kushi, Deputy Chief Economist at First American joins the Yahoo Finance Live panel to discuss How single women have been driving increases in homeownership over the past few years and how COVID and the changing labor market has shifted their house buying power.

Video Transcript

[MUSIC PLAYING]

ZACK GUZMAN: Welcome back. We are kicking off a Women's History Month on the show with a female-focused "Real Estate Report," this week highlighting the larger role women are now playing in home buying. In fact, the homeownership rate among single female-led households was actually higher than single male-headed households. And that trend is on the rise.

And joining us for more on that is Odeta Kushi, Deputy Chief Economist at First American joins us now. Odeta, interesting to see those numbers. And I'm sure there's a lot of reasons as to why that might be. But what do you make of that trend?

ODETA KUSHI: Well, single women are clearly embracing wealth creation through home buying. We've actually seen the single female-headed household homeownership rate outpace single men. For some time now, the trend for that homeownership rate has actually followed the national trend. So really peaking in 2004, 2005, bottoming in about 2016, and has been steadily increasing since 2016. And so clearly, women, as they're becoming more educated, which is yielding higher incomes, are choosing to invest in homes.

AKIKO FUJITA: Odeta, not to make this about men versus women, but I have to wonder if this says more about how women are looking at wealth creation or how men are looking at it. Because it is interesting. The demographics certainly point to more and more people staying single for longer, and yet we haven't seen the same kind of gains in homeownership for men.

ODETA KUSHI: Right. So women are in general, the millennial generation specifically, has been getting married later and later in life compared to their predecessors. And single women obviously, do not want to miss out on the wealth-building component of buying a home. And so I think that's a big reason why we're seeing these numbers. We've also seen surveys which show that women are more interested in homeownership or are prioritizing homeownership to getting married and having kids.

But I think the bigger underlying reason here is, we've been seeing the share of women with a bachelor's degree or higher increase over time significantly. So I think that helps to explain why they're yielding higher incomes and they're more interested in buying a home.

ZACK GUZMAN: Yeah, that's been something I've been watching as well. As you point out, women with bachelor's degrees increasing 13 points in 2020 since the year 2000. That's pretty noticeable. But I wonder how much of it as well maybe comes with that second factor you mentioned, in connecting the dots between college degree increased pay, and maybe potentially risk factors here as well.

I have a friend who is looking at a home, people weigh the market differently. We talked a lot about men maybe perhaps taking on more risk in the stock market. How much of that might be at play here too in looking at wealth creation via real estate versus the market, or dare I say, crypto?

ODETA KUSHI: Well, we do know that wealth, buying a home is one of the biggest positive drivers of wealth creation. And so women certainly could be capitalizing on that and understanding that real estate is a driver of wealth creation. But also, it's something you get to use. You get to live in that home. You get to call something your own. And so I certainly think that that's playing into it as well.

AKIKO FUJITA: And finally, Odeta, I wonder if you can just give us an overview of the housing market overall. We're talking about who's actually buying right now. But there's been a lot of questions about just how much more runway there is, especially with rates so low. We have seen a lot of resilience in the housing market. Do you see a bit of a slowdown coming perhaps in the second half of the year? What's your outlook?

ODETA KUSHI: So the outlook for the housing market remains incredibly strong. There is a whole demographic demand coming from your millennials, your potential first-time home buyers. They're around 30 years old, aging into the prime home buying years. And so that's a demographic tailwind that's coming. And then, of course, you have record low mortgage rates. And even if mortgage rates kind of tick up slightly, they're supposed to remain around 3%. They shouldn't go much higher than that. And historically, that's still very, very low. So obviously, that's working to boost demand.

Supply is still really the issue. There are not enough homes available for sale, and that's really pushing up house prices. And so that's a dynamic that we anticipate to see for the remainder of the year. Of course, if mortgage rates increase slightly, you might see sellers adjust their price expectations a bit. And some of those on the margin buyers might kind of pull back a little bit. But we still anticipate the dynamic to be increasing demand against limited supply, resulting in house price appreciation for the rest of the year.

ZACK GUZMAN: Yeah, that's true for men or women on that front. Odeta Kushi.

ODETA KUSHI: Exactly.

ZACK GUZMAN: Deputy Chief Economist at real estate services company, First American. Appreciate you coming on here to chat today.